KUALA LUMPUR: CIMB Treasury and Markets Research has revised its second-half 2026 (H2 2026) gross domestic product (GDP) growth forecast for Malaysia to 4.1% and raised its full-year 2026 projection to 4.8% from 4.3%, tracking a stronger outturn in the second quarter of 2026.
The research house said the revision was driven primarily by the electrical and electronics (E&E) manufacturing outlook, which it now expects to expand 15.4% year-on-year in 2026.
“Even so, we continue to expect overall growth to moderate to 4.1% in H2 2026 (H1 2026: 5.6%) as softer domestic demand and weaker domestic-oriented manufacturing offset continued strength in export-oriented E&E,“ it said in a note.
CIMB Treasury and Markets Research also projected overall manufacturing growth to ease to 6.1% in H2 2026, compared with 6.6% in H1 2026, while services growth is similarly expected to moderate to 4.2%, from 5.5% in the same period.
“The slowdown in services partly reflects less favourable base effects following last year’s strong performance.
“Nevertheless, sequential growth is expected to remain broadly consistent with historical trends, although higher inflation is also likely to weigh on household spending towards year-end,“ it said.
Meanwhile, the research house said it still expects headline inflation to average 2.6% in Q4 2026, with the anticipated increase remaining primarily driven by cost-push factors.
“Underlying price pressures are also expected to remain contained, with core inflation stable at around 2.2%-2.3%.
“In the absence of meaningful second-round effects, we expect Bank Negara Malaysia to continue looking through this temporary supply-driven inflation,“ it added.
